Kan. gov. has no plans to slow Medicaid overhaul

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Kansas asked the federal government Thursday to waive some of its rules so that the state can overhaul its $2.9 billion Medicaid program, despite concerns among legislators that Gov. Sam Brownback is moving too quickly to turn all of it over to private health insurance companies.

Brownback expects the state to issue contracts this year to three companies to manage the program, which provides health coverage to poor families and disabled and elderly Kansans. The contracts would take effect Jan. 1, 2013, and Kansas wants federal officials to issue a waiver so the state can include services for the disabled and elderly and build in financial incentives for improving services while controlling costs.

If approved, it would mark the first time the state has attempted to cover the disabled and the elderly, including those in nursing homes, in a managed-care program.

Administration officials said the changes will lead to better coordination of services for high-need Medicaid participants, eliminating duplication while improving their health. Kansas plans to have the three contractors operate statewide, so participants have choices in coverage.

Some legislators in both parties want the Republican governor to move more slowly, fearing administrative problems that could affect services, particularly for the disabled and elderly. But administration officials said the governor won't delay any changes.

"Why would we?" said Lt. Gov. Jeff Colyer, a surgeon and former state senator who led the team that developed the overhaul plan. "We don't want to hurt Kansas patients."

Colyer added during an interview with The Associated Press: "We want to make sure that they start getting the benefits now, and we're talking about tens of millions of dollars."

Legislators acknowledged that their role in the overhaul will be limited because most changes will be handled through the contracts. They must agree to a reorganization of the state's health and social services agencies, and they can weigh in on budget issues. Several said lawmakers also could set up an oversight committee.

Sen. Dick Kelsey, a Goddard Republican, said Brownback should delay the start of the Medicaid contracts for six months, until July 1, 2013.

"I don't believe that changes this massive can be made in this time frame successfully," Kelsey said. "It will be a tremendously chaotic thing."

The U.S. Department of Health and Human Services — led by Secretary Kathleen Sebelius, a former Democratic governor of Kansas — could be an obstacle, too. Brownback's administration submitted its waiver request to the HHS center that oversees Medicaid.

The request seeks a waiver of specific rules so Brownback can start the new contracts next year, but it also asks the center for a "global" waiver to give Kansas an even freer hand later. Brownback spokeswoman Sherriene Jones-Sontag acknowledged the broader part of the request is "breaking new ground," but said the first part is not unusual.

"We are confident we will obtain the waiver authority we need," she said.

State medical programs provide services for an average of 380,000 people a month, and the bulk already receive state health coverage through private contractors. Bringing the disabled and elderly into a managed-care system, the state would add Kansans who need relatively expensive, long-term services.

Robert Moser, the state's secretary of health and environment, said Kansas hasn't tried it previously in part because it wasn't sure private health insurance companies wanted to take on the coverage. Now, he said, multiple companies are willing to compete.

Up to 15 companies can bid for the Kansas contracts, including Aetna Inc., United Healthcare, WellPoint Inc. and Blue Cross and Blue Shield of Kansas, the state's largest health insurer. Bidders have until Tuesday to submit the technical details of their proposals to the state, then until Feb. 22 to submit the rest.

Moser predicted that private companies' expertise and national resources will benefit Medicaid participants who haven't previously been in a managed care program.

"They've got more likelihood of seeing improved health care outcomes and more benefits," he said after briefing the House Health and Human Services Committee on the overhaul effort.

Advocates for the developmentally disabled have worried about how the changes will affect services and clients' existing relationships with community service groups. They worry that managed-care contractors won't understand how ongoing, in-home services preserve a client's independence even if they don't prevent medical problems.

Brownback's administration has promised the new contracts will require companies to work through existing service providers.

If the state delays the overhaul, Colyer said, "It will cost us millions of dollars, and it's a worse health outcome."